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Drastically Altered Transportation Budget Now In Senate Hands

The state's two-year transportation budget cleared the House Thursday in a bipartisan vote that underscored the new political dynamics of the chamber.

The $7.94 billion bill (HB 62) is vastly different than the one proposed by Gov. Mike DeWine, who used a portion of his State of the State address this week to implore lawmakers not to downsize a gas tax increase he offered to close what his administration said is a gap of more than $1 billion for state transportation infrastructure projects.

The bill, which was approved 71-27, was opposed by a third of the majority GOP caucus but passed with the support of most Democrats, many of who helped put Speaker Larry Householder (R-Glenford) over the top in his bid for the gavel in January. 

The governor said in a statement after the vote that the final product from the House is "far from ideal."

"I am very open to dialogue with the legislature on this issue, but I continue to believe that our proposal as introduced provides the money it takes to do the job right," he said. "I plan to work with the Senate to improve the House-passed bill and work toward a final agreement that funds vital maintenance, new construction, promotes jobs, makes our state more competitive, and enhances safety for the driving public."

The governor's proposal called for an indexed increase in the motor vehicle fuel tax of 18 cents per gallon effective July 1 that would have generated $1.2 billion.

The House Finance Committee instead opted to pare the request back to 10.7 cents-per-gallon phased in over three years beginning Oct. 1. It also increased the tax on diesel fuel by 20 cents per gallon over a three-year period. 

However, a floor amendment offered by Rep. Scott Oelslager (R-N. Canton) at the request of the administration changed the phase-in of the gas tax to two years. It was approved in a 64-34 vote.

The new schedule would boost the tax by 7 cents per gallon in the first year and 3 cents in the second. The three-year phase-in of the diesel tax increase remains in place.

"When you look at their budget planning, to have it in the first year was better" for the administration, Speaker Householder said after session. "This is so narrow, we believe that we're trying to fill a hole, but we're not trying to fill a hole beyond what's needed. We are so close it mattered how it was phased in."

Once fully phased in, the increased taxes will generate an additional $872 million annually.

However, by ratcheting up the increase over time instead of immediately, and reducing the overall tax hike, the lower chamber slashed spending in the governor's plan by more than $900 million over two years. 

All told, the latest version of the proposal pares back the governor's transportation budget by about $519 million in the first year of the upcoming biennium and $385 million in the second, according to the Legislative Service Commission. The reductions in the highway construction line item resulted in cutbacks of $11.8% in FY 2020 and 8.6% in FY 2021 compared to the as-introduced version.

"It's a process and this is the first step of the process and we put something together which the House agrees to and now it moves over to the Senate," Speaker Householder said. "Where we're at right now in working with the administration, I understand that they would like more, but this is where we're at."

The House Finance Committee also removed language that provided Department of Transportation Director Jack Marchbanks with the authority to impose a variable speed limit on any state highway and made several other changes to the bill this week. 

Democrats, meanwhile, scored some major victories in the version of the bill now headed to the Senate.

The governor had proposed upping spending on public transit to $40 million per year from the current level of $33 million annually. The number House members ultimately settled on is $100 million each year. 

Minority party members also supported additional funding to local governments with a change in the allocation of gas tax revenue from a 60-40% split between the state and counties, cities, villages and townships to a 55-45%.

Rep. Jack Cera (D-Bellaire), the ranking member on the House Finance Committee, was behind an amendment aimed at helping areas of the state where fracking is occurring. It requires annual transfers of $5 million from the Oil and Gas Fund to local governments in counties with at least one well producing oil or gas in the Utica or Marcellus shale formation for infrastructure needs.

He praised the process to get the bill through the House as a bipartisan one and lauded the substance of the measure, calling it a "jobs bill."

"It is, no doubt, probably one of the major jobs bills we have," he said.

Rep. Oelslager echoed that sentiment, saying that for every $1 billion invested in the state's roads and bridges, more than 27,000 jobs are created.

The House version also made changes to:

  • Levy a fee of $200 on electric vehicles and a fee of $100 on hybrid vehicles.
  • Repeal the requirement that vehicles have a front license plate.
  • Increase the deputy registrar fee to $5.
  • Provide cities and townships with permissive authority to levy an additional $5 motor vehicle registration fee.
  • Create a regulatory framework around low-speed electric scooters.
  • Prohibit ODOT from closing rest stops.
  • Grant municipal and county courts exclusive jurisdiction over every civil citation issued for a moving violation recorded by a traffic camera.

Before its passage, two Republican-offered amendments were defeated with bipartisan majorities.

Rep. Kyle Koehler (R-Springfield) sought to revert public transit funding back to the $33 million per year proposed by Gov. DeWine.

"I think we need to figure out a way to save some money," he said, before his proposal was tabled in a 71-25 vote.

Another amendment, offered by Rep. Craig Riedel (R-Defiance), would have doubled the threshold at which the prevailing wage law kicks in for public projects. He called the proposal a way to provide some relief to those that will see prices increase when fueling their vehicles.

"The perception is we are flush with money and the average fellow on the corner has got to wonder why we are going back to them again and asking for more money at the pump," he said.

It was tabled in a 71-27 vote.

The speaker rose to power, in part, by vowing not to back anti-labor legislation, which helped him to earn the support of 26 Democrats.

"There was 27 members out of 99 that voted in favor of not tabling it," Mr. Householder said of the proposed amendment. "I think that's a statement."

The funding shortfall – described by the governor and Director Marchbanks as a "fiscal cliff" – was caused by a combination of factors, including a stagnate gas tax rate last raised in 2005, greater fuel efficiency, inflation and the end of revenue from turnpike bonding under former Gov. John Kasich.

About 44% of the department's budget comes from the gas tax, the expenditure of which is constitutionally limited to roads and bridges.